Insurance Glossary

UMBRELLA POLICY

Liability insurance that provides additional coverage above the limits of underlying policies such as homeowners, auto, or boat insurance. Umbrella policies often offer broader coverage than the underlying policies.

UNBUNDLED CONTRACTS

A type of annuity contract that allows purchasers to select optional features individually rather than as part of a bundled package.

UNDERINSURANCE

A situation in which a policyholder does not carry sufficient insurance coverage to fully cover a loss, resulting in partial reimbursement for damages.

UNDERWRITING

The process by which insurers evaluate, accept, reject, and classify risks to determine appropriate coverage terms and premium levels.

UNDERWRITING INCOME

The profit an insurer earns from insurance operations after claims and expenses are paid. If premiums do not cover losses and expenses, the result is an underwriting loss.

UNEARNED PREMIUM

The portion of an insurance premium that has been paid in advance but has not yet been earned because the coverage period has not expired.

UNINSURABLE RISK

A risk that insurers are unwilling or unable to cover due to excessive uncertainty, frequency, or severity of potential loss.

UNINSURED MOTORISTS COVERAGE

Auto insurance coverage that protects policyholders against losses caused by uninsured or hit-and-run drivers.